georgia advancing communities together, inc. …€¦ · position of georgia advancing communities...

GEORGIA ADVANCING COMMUNITIES TOGETHER, INC.

FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017


TABLE OF CONTENTS

INDEPENDENT AUDITOR’S REPORT 3 FINANCIAL STATEMENTS:

Statements of Financial Position 4 Statements of Activities 5-6 Statements of Functional Expenses 7-8 Statements of Cash Flows 9 Summary of Accounting Policies 10-12

Notes to Financial Statements 13-14

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INDEPENDENT AUDITOR’S REPORT

To the Board of Directors of Georgia Advancing Communities Together, Inc. Atlanta, Georgia We have audited the accompanying financial statements of Georgia Advancing Communities Together, Inc. which comprise the statements of financial position, as of December 31, 2018 and 2017, and the related statements of activities, statements of functional expenses, and cash flows for the years then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Georgia Advancing Communities Together, Inc. as of December 31, 2018 and 2017, its changes in net assets and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Dunwoody, Georgia June 26, 2019

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2018 2017ASSETS

CURRENT ASSETS:Cash and cash equivalents 190,414$ 235,438$ Pledges receivable 42,500 85,000 Other receivables - 3,467

Total Current Assets 232,914 323,905

LONG TERM PLEDGE RECEIVABLE (NOTE 2) - 42,500

FURNITURE AND EQUIPMENT, at cost, lessaccumulated depreciation of $2,726 for both years - -

SECURITY DEPOSIT 337 337

TOTAL ASSETS 233,251$ 366,742$

LIABILITIES AND NET ASSETSLIABILITIES:

Accounts payable and accruals 25,499$ 18,327$ Other liabilities 5,000 -

Total Liabilities 30,499 18,327

NET ASSETS: Without donor restrictions

Unrestricted 122,925 116,158

With donor restrictions (Note 5)Purpose restrictions 17,177 84,607 Time restrictions 62,650 147,650

79,827 232,257

Total Net Assets 202,752 348,415

TOTAL LIABILITIES AND NET ASSETS 233,251$ 366,742$


Statements of Financial Position

December 31,

See accompanying summary of accounting policies and notes to financial statements.

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Without Donor With Donor Total

Restrictions Restrictions Net AssetsPUBLIC SUPPORT:

Grants and contributions (Note 3) 47,145$ 7,500$ 54,645$

Total Public Support 47,145 7,500 54,645

REVENUE:Membership dues 9,698 - 9,698 Conference income 27,265 - 27,265 Service Fees 30,800 - 30,800 Other 332 - 332

Total Revenue 68,095 - 68,095

Total Public Support and Revenuebefore Transfers 115,240 7,500 122,740

Net Assets Released from restrictions dueto satisfaction of donor-imposedrequirements 159,930 (159,930) -

Total Public Support and Revenue 275,170 (152,430) 122,740

EXPENSES:Program 222,356 - 222,356 Management and general 28,595 - 28,595 Fundraising 17,452 - 17,452

Total Expenses 268,403 - 268,403

CHANGES IN NET ASSETS 6,767 (152,430) (145,663)

NET ASSETS:Beginning of year 116,158 232,257 348,415

End of year 122,925$ 79,827$ 202,752$


Statement of ActivitiesFor the Year Ended December 31, 2018


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Without Donor With Donor Total

Restrictions Restrictions Net AssetsPUBLIC SUPPORT:

Grants and contributions (Note 3) 71,410$ 235,000$ 306,410$

Total Public Support 71,410 235,000 306,410

REVENUE:Membership dues 10,523 - 10,523 Conference income 20,116 - 20,116 Service fees 4,612 - 4,612 Other 1,911 - 1,911

Total Revenue 37,162 - 37,162

Total Public Support and Revenuebefore Transfers 108,572 235,000 343,572

Net Assets Released from restrictions dueto satisfaction of donor-imposedrequirements 204,200 (204,200) -

Total Public Support and Revenue 312,772 30,800 343,572

EXPENSES:Program 265,049 - 265,049 Management and general 31,606 - 31,606 Fundraising 14,736 - 14,736

Total Expenses 311,391 - 311,391

CHANGES IN NET ASSETS 1,381 30,800 32,181

NET ASSETS:Beginning of year 114,777 201,457 316,234

End of year 116,158$ 232,257$ 348,415$

For the Year Ended December 31, 2017Statement of Activities



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ManagementProgram and General Fundraising Total

Compensation and related costs 109,428$ 19,842$ 12,458$ 141,728$ Outside Services 69,209 412 15 69,636 Office 478 87 55 620 Occupancy 5,309 963 605 6,877 Travel 14,097 2,556 1,605 18,258 Insurance 1,077 195 122 1,394 Supplies 3,239 587 369 4,195 Telecommunications 2,862 519 326 3,707 Postage and printing 1,735 315 197 2,247 Staff training 13,377 2,426 1,523 17,326 Other 1,545 693 177 2,415

Total expenses 222,356$ 28,595$ 17,452$ 268,403$


Statement of Functional ExpensesFor the Year Ended December 31, 2018

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ManagementProgram and General Fundraising Total

Compensation and related costs 143,270$ 16,138$ 12,275$ 171,683$ Outside Services 88,237 12,147 42 100,426 Occupancy 6,238 703 534 7,475 Travel 2,968 334 254 3,556 Conferences and meetings 4,312 - - 4,312 Insurance 1,252 141 107 1,500 Supplies 1,514 171 130 1,815 Telecommunications 3,218 363 276 3,857 Postage and printing 2,051 231 175 2,457 Staff training 5,794 653 497 6,944 Other 6,195 725 446 7,366

Total expenses 265,049$ 31,606$ 14,736$ 311,391$


Statement of Functional ExpensesFor the Year Ended December 31, 2017

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2018 2017CASH FLOWS FROM OPERATING ACTIVITIES:

Changes in net assets (145,663)$ 32,181$ Adjustments to reconcile changes in net assets to netcash provided by (used in) operating activities:

(Increase) decrease in receivables 88,467 (86,267) (Increase) decrease in security deposits - 213 Increase (decrease) in accounts payable and accruals 7,172 (2,768) Increase (decrease) in other liabilities 5,000 (895)

Net Cash Provided by (Used in) Operating Activities (45,024) (57,536)

NET INCREASE (DECREASE) IN CASH AND CASHEQUIVALENTS (45,024) (57,536)

CASH AND CASH EQUIVALENTS:Beginning of year 235,438 292,974

End of year 190,414$ 235,438$

For the Year EndedDecember 31,

Statements of Cash Flows



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SUMMARY OF ACCOUNTING POLICIES

ORGANIZATION Georgia Advancing Communities Together, Inc.(the "Organization") was formed in 2001. During 2014, the Organization changed its name to Georgia Advancing Communities Together, Inc. (from Georgia State Trade Association of Nonprofit Developers, Inc. The Organization’s main purpose is to build a network of strong nonprofit organizations engaged in housing and community development throughout Georgia. The Organization has two categories of membership: (1) Members (voting) are for nonprofit developers and (2) Affiliate Members (non-voting) are for organizations and companies that support the affordable housing field.

BASIS OF ACCOUNTING The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The net assets, revenue, support, expenses, gains and losses are classified based on the existence or absence of donor-imposed restrictions into two classes:

Net assets without donor restrictions are currently available for purposes under the direction of the board, designated by the board for specific use, or resources invested in furniture and equipment. Net assets with donor restrictions are contributed with donor stipulations for specific operating purposes or programs, with time restrictions, or not currently available for use until commitments regarding their use have been fulfilled.

CASH AND CASH EQUIVALENTS

The Organization maintains its cash and cash equivalents with high credit, quality financial institutions, which, at times, may exceed federally insured limits. The Organization has not experienced any losses in such accounts, and management believes it is not exposed to any significant credit risk on cash and cash equivalents.

PLEDGES RECEIVABLE Pledges receivable are stated at the amount management considers to be collectible. Management reviews outstanding pledges for collectability and has determined that all pledges receivable at December 31, 2018 and 2017 are collectible based on historical experience and, therefore, no allowance for uncollectible pledges is considered necessary. OTHER RECEIVABLES Other receivables represent charges to customer for services delivered. Management reviews amounts past due and provides an allowance for those amounts deemed uncollectible. Management considers all accounts collectible at December 31, 2018 and 2017.

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SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

FURNITURE AND EQUIPMENT Furniture and equipment is stated at cost. Depreciation is computed over the estimated useful lives (3 years) of the assets using the straight line method. Acquisitions of property and equipment or repairs, maintenance, or betterments that materially prolong the useful lives of assets are capitalized. PUBLIC SUPPORT AND REVENUE RECOGNITION Support is recognized in the year received at its fair market value. Contributions with donor-imposed restrictions are reported as restricted-support. The satisfaction or expiration of donor-imposed restrictions is recorded as a transfer from net assets with donor restrictions to net assets without donor restrictions in the year the satisfaction or expiration occur. Pledges to give payments in future years are recorded as support in the year the pledge is made. Membership dues are recognized as revenue over the membership period (January through December). EXPENSE RECOGNITION All expenses are recognized in the statement of activities as decreases in unrestricted net assets. FUNCTIONAL ALLOCATION OF EXPENSES The Organization allocates its expenses on a functional basis among their various programs and support services. Expenses that can be identified with a specific program and support services are allocated directly according to their natural expenditure classification. Indirect expenses have been allocated based on salary expenditures and other criteria. USE OF ESTIMATES The preparation of financial statements in accordance with GAAP requires reliance on accounting information based on estimates which may or may not come true in the near term. Significant estimates include the allocation of expenses on a functional basis. INCOME TAXES The Organization is exempt from income taxes under section 501 (c)(3) of the Internal Revenue Code. Accordingly, no income taxes are reflected in the accompanying financial statements. In addition, the Organization has been classified as an entity that is not a private foundation within the meaning of Section 509 (a).

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SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

OPERATING LEASE In March 2015, the Organization entered into a lease to rent office space under an operating lease that expired in March 2018. The lease was cancellable by either party with a 30 day notice. For the years ended December 31, 2018 and 2017, total rent expense for this operating lease was $6,435 and $7,150. In March 2018, the Organization renewed the lease to rent office space which expires in May 2021. The lease is cancellable by either party with a 30 day notice. Monthly rent under the renewed lease is $605. SUBSEQUENT EVENTS Subsequent events have been evaluated through the audit report date, which is the date the financial statements were available to be issued. UNCERTAIN TAX POSITIONS The Organization recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authority, based on the technical merits of the position. As of December 31, 2018 and 2017, there are no known items which would result in a material accrual related to where the Organization has federal or state attributable tax positions. Generally, taxing authorities have from the later of the filing date or the extended due date to examine a tax filing. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued a new accounting standard, ASU 2014-09 (Topic 606), which impacts revenue recognition for exchange transactions. The standard will take effect for annual financial statements issued for fiscal years beginning after December 15, 2018. Early adoption is permitted subsequent to periods beginning after December 15, 2016. The Organization plans to adopt ASU 2014-09 (Topic 606) for the year beginning after December 15, 2018. The Organization is currently evaluating the impact that the adoption of this guidance will have on the Organization’s financial statements. In February 2016, the Financial Accounting Standards Board (FASB) issued a new accounting standard, ASU No. 2016-02, Leases (Topic 842), which provides guidance for accounting for leases. The new guidance requires companies to recognize the assets and liabilities for the rights and obligations created by leased assets, initially measured at the present value of the lease payments. The accounting guidance for lessors is largely unchanged. The ASU is effective for fiscal years beginning after December 15, 2019. It is to be adopted using a modified retrospective approach. The Organization is currently evaluating the impact that the adoption of this guidance will have on the Organization’s financial statements. In June 2018, the FASB issued a new accounting standard, ASU 2018-18 (Topic 958), to clarify and improve the scope and the accounting guidance for contributions received and contributions made. The standard will take effect for annual financial statements issued for fiscal years beginning after December 15, 2018. Early adoption is permitted. The Organization plans to adopt ASU 2018-08 (Topic 958) for the year beginning after December 15, 2018. The Organization is currently evaluating the impact that the adoption of this guidance will have on the Organization’s financial statements.

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NOTES TO FINANCIAL STATEMENTS

NOTE 1 – CONTINGENCY The Organization depends heavily on contributions to support ongoing operations. To the extent economic conditions negatively impact future contribution levels, the Organization's ability to continue at its current level of activity could be substantially impacted. NOTE 2 – PROMISES TO GIVE A summary of promises to give in pledge receivables consist of the following:

As of December 31, 2018 2017 Receivables in less than one year $ 42,500 $ 85,000 Receivables in one to five years - 42,500

$ 42,500 $ 127,500

NOTE 3 – CONCENTRATIONS For the year ended December 31, 2018, the Organization received contributions of $60,000 from two sources. Additionally, the Organization was owed pledges receivable from an additional donor of $42,500 at December 31, 2018. During the year ended December 31, 2017, the Organization received contributions of $210,000 from two sources. The related pledge receivables for these sources amounted to $127,500 at December 31, 2017. NOTE 4 – SIMPLIFIED EMPLOYEE PENSION The Organization has one full time employee. The Organization contributes to a simplified employee pension for this full time employee. For the years ended December 31, 2018 and 2017, the contributions amounted to $5,000 and $5,680, respectively.

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NOTES TO FINANCIAL STATEMENTS (CONCLUDED)

NOTE 5 – NET ASSETS WITH DONOR RESTRICTIONS Net assets with donor restrictions include amounts in cash and receivables with the following donor-imposed restrictions:

As of December 31, 2018 2017 NeighborWorks-CDC Capacity

Building Initiative $ - $ 9,993 Annie E. Casey-Neighborhood

Revitalization Peer Leadership and Learning Network 12,177 28,112

Mary Reynolds Babcock 62,650 147,650 Fifth Third Bank-Capacity Building - 25,000 Enterprise Community Partners-

Atlanta Housing Coalition Building - 21,502

Wells Fargo-Community Development 5,000 -

$ 79,827 $ 232,257

NOTE 6 – LIQUIDITY AND FUNDS AVAILABLE The Organization has $232,914 of financial assets available within one year of the balance sheet date to meet cash needs for general expenditures consisting of cash and cash equivalents of $190,414, and receivables of $42,500. Receivables are expected to be collected within one year. Included in the above amounts is $79,827 in donor restricted net assets; however, these funds are available to be used in the next year. As part of the Organization’s liquidity management, it has a policy to structure its financial assets to be available as its general expenditures, liabilities, and other obligations come due.

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